India, Kenya deepen trade ties, strong push towards local currency settlement

India and Kenya are stepping up efforts to deepen trade ties and reduce transaction frictions, with a strong push toward local currency settlement and sectoral collaboration emerging as key takeaways from the 10th Session of the India–Kenya Joint Trade Committee (JTC) held in Nairobi.

The meeting, co-chaired by Commerce Secretary Rajesh Agrawal and Kenya’s Principal Secretary for Trade Regina Akotah Ombam, comes at a time when bilateral trade is witnessing strong momentum. Discussions focused on enhancing trade diversification, addressing market access issues and leveraging complementarities in sectors such as engineering goods, pharmaceuticals, agriculture and electronics.

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Trade between the two countries rose 24.91% to $4.31 billion in 2025–26, up from $3.45 billion in the previous fiscal, reinforcing India’s position as a key trading partner for Kenya.

Both sides acknowledged the potential for promoting trade settlement in local currencies. It was noted that Kenyan banks have opened Special Rupee Vostro Accounts (SRVAs) with Indian banks, and greater utilisation of this framework could facilitate smoother bilateral transactions. The possibility of adopting a Local Currency Settlement (LCS)
mechanism was also discussed.

The two countries also explored the possibility of a broader Local Currency Settlement (LCS) mechanism, signalling a strategic shift toward insulating trade from global currency volatility.

Sectoral cooperation in emerging areas was deliberated. In engineering and manufacturing, opportunities to expand exports of automobiles, machinery and construction equipment were highlighted.

Collaboration in infrastructure development, including railways, was discussed, with India offering support in feasibility studies, project management and supply of rolling stock for Kenya’s Standard Gauge Railway. Opportunities for collaboration in shipbuilding with Indian shipyards were also explored.

In pharmaceuticals, India highlighted its role as a supplier of affordable generic medicines and medical devices and proposed enhanced business-to-business engagement. Both sides also discussed enhancing trade in agricultural products while addressing sanitary and phytosanitary barriers.

In renewable energy, India expressed readiness to support Kenya’s clean energy initiatives, including solar and wind projects. The Kenyan side informed that it has conveyed its decision to sign the International Solar Alliance Framework Agreement and looks forward to signing it at the earliest. Discussions on digital public infrastructure covered collaboration on UPI-like payment systems, Bharat Connect and digital platforms to enhance financial inclusion.